.. ,
,
Date: 23/0112021
IArr-2/ME
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY; DHAKA
Ir4rr-2 B. Sc. Engineering Examinations (January 2020 Tenn)
Sub:
IPE 481 (Industrial Management)
Time: 2 Hours (Sectious A + B)
Section Marks: J 20
Full Marks: 240
USE SEPARATE SCRIPTS FOR EACH SECTION
The figures in the margiu indicate full marks.
SECTJON-A
There are THREE questions in this section. Answer a.nyTWO.
1.
is having cash crisis.
the crisis. According
existing capacity and
term impact over the
(15)
(b) Managers often assume a strictly linear relationship between cost and production
volume. How can this practice be defended in light of the fact that many costs are
curvilinear? Explain the negative consequences of this practice if there is any.
(15)
(c) Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman,
Montana. For its services; the company has always charged a flat fee per hundred square
feet of carpet cleaned. TIle current fee is $28 per hundred square feet. However, there is
some question about whether the company is actually making any money on jobs for some
customers-particularly
those located on remote ranches that require considerable travel
time. The owner's daughter, home for the summer from college, has suggested
investigating this question using activity-based costing. After some discussion, a simple
system consisting of four activity cost pools seemed to be adequate. The activity cost
pools and their activity measures appear below:
(30)
(a) In the ongoing pandemic situation, a manufacturing company
The company is planning to reduce fixed costs in order to manage
to you, which types of costs can be reduced while maintaining
production volume and why? Does this decision have any long
company?
Activityfor the Year
ACtivityMeasure
ActivityCost Pool
Cleaning carpels
,
Square feet cleaned (OOs) 20,000 hundred square feet
60.000 miles
Travelto jobs
' Milesdriven
2,000 jobs
Job support
: . . . . .. . Number of jobs
Other (costs of idlecapacity and
Not applicable
None
organization-sustainingcosts) ....
TIle total cost of operating
following costs:
the company for the year is $430,000,
Wages
Cleaning supplies
Cleaning equipment depreciation
Vehicle expenses
Office expenses
,
President's compensation
.
.
.
.
:
Total cost
__~
.•~,.,..,'
Resource consumption
.
•••_,•••.••
,_.•••
, _'-.~'~'
","4d-._'_~--:"""--""- __~~
which includes the
$150.,0.0.0. ~
40.,0.0.0. f',
20.,00.0.
'. 80.,0.00
60.,00.0
.
.
i
~
~
. ,oo~o
$:3~,oao.,.
is distributed across the activities as follows:
Pa.ge 1 of 6
,
,,
Date: 23/0112021
L-4rr-2fME
~.~-
.....• _~. -.~'~'
.
~. _.-
.,
, Dis'tribution
Activiti,es,.
~ of Resource ConsumptionAcross
. ~
.
Cleaning
Carpets .
l..:
70%
Wages
;
.
. Cleaningsuf:iplies
;
. ..100%
80%
Cleaningequipmentdepreciation..
0%
Vehicleexpenses
.
0%
Officeexpenses
.
0%
.President'scompensation
; ..
Travelto
Jobs
20%
0%
0%
60%
0%
0%
Job
Total'
Support.
Other
0%
0%
0%
10%
100%
0%
20%
100%
100%
100%
100%
100%
0%
45%
40%
40%
55%
60%
Job support consists of receiving calls from potential customers at the home office,
scheduling jobs, billing, resolving issues, and so on.
1.
II.
Ill.
IV.
v.
VI.
2.
Prepare the first-stage allocation of costs to the activity cost pools.
Compute the activity rates for the activity cost pools.
TIle company recently completed a 500 square foot carpet-cleaning job at the
flying N Ranch-a 75-mile round-trip journey from the company's offices in
Bozeman. Compute the cost of this job using the activity-based costing system.
The revenue from the flying N ranch was $140 (500 square feet@ $28 per
hundred square feet). Prepare a report showing the margin from this job.
What do you conclude concerning the profitability of the Flying N ranch job?
Explain.
What advice would you give the president concerning pricing jobs in the
future?
(a) Due to fluctuation in sales, Company Y is experiencing some problems. Company's
income statement for the most recent month is given below:
Sales (30,200 units • $42)....................
Less variable expense...
Contribution margin
Less fixed expenses
Net Income
1.
11.
111.
IV.
v.
$1,268,400
815,400
"
,
"
453,000
380,000
:..73,000
Compute the company's CM ratio and its break-even point in both unit and
dollars.
The president is certain that a $26,000 increase in the monthly advertising
budget, combined with an intensified effort by the sales staff will result in a
$90,000 increa~e in monthly sales. If the President is right, what will be the
effect on the company's net income or loss?
Refer to the original data, the sales manager is convinced that a 8% percent
reduction in the selling price, combined with an increase of $50,000 in the
monthly advertising budget, will cause Imit sales to double. What will be the
new income statement look like if these changes are adopted?
Refer to the original data, the marketing department thinks that a fancy new
package would increase would help sales. The new package would increase
packaging costs by $1.2 per unit. Assuming no other changes in cost behavior,
how mmlY units would have to be sold each month to earn a net income of
$95,000?
Refer to the original data, by automating certain operations; the company
could reduce variable costs by $3 per unit. However, fixed costs would
increase by $72,000 each month. Compute the new CM ratio and the new
break-event point in both units and dollars. Assume that the company expects
to sell 38,000 units next month. Prepare two income statements, one assuming
that operations are not automated and one assuming that operations are
automated, Would you recommend that the compmlY automate its operations
mld why?
Pagc 2 orr.
(40)
"
Date: 23/01/2021
IAff.2/ME
VII.
3.
Refer to the original data, a large distributor has offered to make a bulk
purchase of extra 5,000 units each month on a special price basis. Variable
selling expenses of $1 per unit could be avoided on this sale. What price per
unit should the company quote to the distributor if the company wants to make
an overall net income of $98,000 each month for the company as a whole?
(b) Define operating leverage and explain its significance.
(08)
(c) Explain how the concept of the Equity theory can playa significant role in motivating
employees.
(12)
(a) E Mines Inc. is contemplating the purchase of equipment to exploit a mineral deposit
that is located on land to which company has mineral rights. An engineering and cost
analysis has been made and it is expected that the following values would be associated
with opening and operating a mine in the area:
(20)
$480000
$220000
$] 90000
$220000
$22000
$80,000
ea.'s
Salva e value of e ui ment
$85000
It is estimated that mineral deposit would be exhausted after eight years. At that point, the
working capital required would be released for reinvestment elsewhere. The company's
cost of capital is 12%. Determine the net present value of the proposed mining project.
Should the project be undertaken and why?
(b) The company G prepares its master budget on a quarterly basis. The following data
have been estimated to assist in preparation of the master budget for the first quarter of
2021:
As of December 2020, the company's general ledger showed the following
account balance:
Debits
$48000
$224000
$60000
$370000
Cash
Accounts Receivables
Inventon'
Plant and Eouinment
Ace.ounts Pavable
Canital Stock
Retained Earninl!s
$702.000
Credits
$93000
$500000
$] 09000
$702,000
Actual sales for December and budgeted sales for the next four months are as
follows:
December
,January
February
Ma,"ch
API"il
$280000
$400000
$600000
$300000
$200,000
Sales are 20% for cash and 80% on credit. Payments are collected in the month
following sales. Accounts receivables at December 3] are a result of December
credit sales.
The company's gross profit rate is 40% of sales.
"
Page 3 of6
(40)
'.
Date: 23/0112021
L-4rr-2/ME
Monthly expenses are budgeted as follows: salaries and wages, $27,000 per
month; advertising, $70,000 per month; freight-out, 5% of sales; depreciation,
$14,000 per month; other expenses, 3% of sales.
At the end of each month, inventory is to be on hand equal to 25% of the following
month's sales needs, slated at cost.
50% of a month's inventory purchase is paid for in the month of purchase; the
other 50% is paid for in the following month.
During February, the company will purchase a new copy machine for $1,700 cash.
During March, other equipment will be purchased for cash at a cost of$84,500.
During January, the company will declare and pay $45,000 in cash dividend.
The company must maintain a minimum cash balance of $30,000. An open line
of credit is available at a local bank for any borrowing that may be needed during
the quarter. All borrowing is done at the beginning of a month, and all repayments
are made at the end of a month. Borrowings and repayments of principals must be
in multiples of $1,000. Interest is paid only at the time of payment of principal.
The interest rate is 12% per year. (Figure interest on whole month, e.g., 1/12,
2/12)
Using the data above, complete the following statements and schedules for the first
quarter of 2021 :
I.
Schedule of expected cash collections:
.Janual"V
$80000
$224000
$304,000
Februal"V
March
Oual.tel'
.Januarv
$240,000
Feh •.••arv
$360,000
March
Oual.ter
Cash Sales
Credit Sales
Total
Cash
Collections
11.
Inventory purchase budget:
Budgeted cost
of l!oods sold
Add: Desi,'ed
ending
inventorv
Total needs
Deduct:
Beginning
inventol"V
Required
pnrchase
$90,000
$330000
$60,000
$270,000
For January sales: $400,000 sales • 60% = $240,000; $360,000' 25% = $90,000.
111.
I
I
Schedule of cash disbursements for purchases: .
Decembe,'
purchase
January
plII'chase
(S270.000)
Feb •.••ary
purchase
March
olll"Chase
Total cash
disblll"sements
.Januarv
$93,000
Feb •.••al"V
$135,000
$J 35,000
March
Ouarter
.
$228,000
Page 4 ofr.
Datc: 23/01/2021
L-4rr-2/ME
IV.
Schedule of cash disbursements
Januarv
Salaries and
wages
Advertising
Freil,ht-i1ut
Other' expenses
Total cash
disbursements
V.
March
Ouarter
Februarv
March
Ouarter
$70,000
$20,000
$12,000
$129,000
Cash budget:
$48,000
Cash balance,
beginning
Add cash
collections
$304,000
Total cash
available
Less
disbursements
$352,000
Purchase of
inventory
Operating
exnenses
Purchase of
eauinment
Cash dividends
$228,000
Total
disbursements
Excess
(deficiency)
cash
Financing
VIII.
Februarv .
$27,000
Januarv
VI.
for expenses:
$129,000
$45,000
$402,000
(52,000)
of
.
Prepare an income statement for the quarter ending March 31, 2021 (Ignore
income taxes).
Prepare a balance sheet as of March 31, 2021.
Page 50f6
Date: 23/0112021
IArr-2/ME
SECTJON-B
There are THREE questions in this section. Answer any lWO.
4.
(a) "The intermediaries,
sometimes called resellers, are critical to the success of
a company's
program" - justify this statement with the help of an
marketing
(10)
example.
(b) How product line-filling can help a company keep its competitors out?
(10)
(c) What type of distribution
(15)
channel is typically used for consumer products?
Was this typical scenario disrupted under the situation of COVID-19?
Explain
with necessary examples.
(d) What are the dimensions in which a product can be differentiated?
Discuss
(25)
their effect on customer satisfaction.
5.
(a) How a leader can build trust among his/her followers?
(10)
(b) "When a company is geographically
(10)
is more appropriate"
dispersed, centralized decision making
- do you agree to this statement? Justify your answer.
(c) Explain the three stages of technology life cycle (TLC) with the help of the
S-curve of technological
(d) Describe
(20)
progress.
"The Hawthorne
Experiments"
conducted
at Western Electric
(20)
Company. Discuss the outcomes and conclusions of the studies.
6.
(a) What are the sources of competition for an industry? Discuss with necessary
(14)
examples.
(b) Discuss the different challenges ofmanagernent
(c) Assess the perfornlance
ofleadership
o
The
with necessary examples.
of a given team leader according to Fiedler model
using the follO"ving information:
leader
was
scored
60 using
least
preferred
co-worker
(LPC)
questionnaire
o
The leader has limited power to reward or punish the members of his team
o
The leader is trusted by his team members
o
The task assigned to the team is well structured
Justify your answer with the help of the graphical representation
of the Fiedler model.
Page 6 of6
of the findings
(16)
(30)
Date: 07/04/2019
L-4/T-2/ME
}
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T -2 B. Sc. Engineering Examinations 2017-2018
i
Sub:
IPE 481 (Industrial Management)
Time: 3 Hours
Full Marks: 280
USE SEPARATE SCRIPTS FOR EACH SECTION
The figures in the margin indicate full marks.
SECTION-A
There are FOUR questions in this section. Answer any THREE.
I. (a) Akhter Furnitures make home office furniture from fine hardwoods. The company uses a
job-order costing system and predetermined overhead rates to apply manufacturing overhead
cost to jobs. The predetermined overhead rate in the Preparation Dept. is based on machinehours, and the rate in the Fabrication Dept. is based on direct materials cost. At the beginning
(20)
of the year, the company's management made the following estimates for the year;
Department
Machine-hours
Directlabor.hours
Directmaterials cost
Directlabor cost
~anufacturing overhead cost
.
.
.
.
Preparation
Fabrication
80,000
35,000
$190,000
$280,000
$416,000
21,000
65,000
$400,000
$530,000
$720,000
I
Job 127 was started on April I and completed onMay 12, The company's cost records show
the following information concerning the job:
Department
Preparation
Machine.hours
.
.Directlabor.hours. .
.
i 'D'
,
I
Irectmatenals
cosl .. , ,
I~rec:~abor cost
.
.
.
Fabrication
350
70
80
130
$940
$1,200
$980
$710
Required:
(i) Compute the predetermined
overhead rate used during the year In the Preparation
Department and the Fabrication Department.
(ii) Compute the total overhead cost applied to Job 127.
(iii) What would be the total cost recorded for Job 1277 If the job contained 25 units, what
would be the unit product cost?
(iv) At the end of the year, the records of Akhter Furnitures revealed the following actual
cost and operating data for all jobs worked on duting the year:
Contd
P/2
=2=
IPE 48l(ME}
\
Coutd ... Q. No. 1(al
Department
Machine-hours.
Direct labor-hours
Direct materials cost ..
Manufacturing
overhead ---'cost
L.... "
Preparation
Fabrication
73.000
30.000
5165.000
5390.000
24.000
68.000
$420.000
$~40.~~
_
I
What the amount was of under-applied or over-applied overhead in each department at the
end of the year?
(b) The following selected account balances for the year ended December 31 are provided for
(26%)
SMC Inc. Company:
, Advertising expense
'_':'
. Insurance. factory equipment.
.'>"
Depreciation. sales equipment. . . . . . . . . . .
Rent. factory building
.' . . . . . . .
Utilities. factory. . .
...........
i Sales commissions . . . . . . . . . . . . . . . . . . .
Cleaning supplies. factory. . . .
I Depreciation, factory equipment . . . . . .
Selling and administrative salaries. . . . . . . .
. Maintenance, factory. . . . . . . . .. . . . . . . . .
Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . .
, Purchases of raw materials
_
'
I
$215,000
...",.$8,000
$40-,000.
$90.000
$52.000
$35.000
$6.000
$110,000
$85,000
$74,000
/./
I
;'
?
$260,000
Inventory balances at the beginning and end of the year were as follows:
~-
--_._-_.
----------------_.
Beginning
End of
ofYear
Year
.
'
• Raw materials
Work in pfocess
. Finished goods
.
.
.
$50,000
?
$30,000
$40,000
$33,000
?
The total manufacturing costs for the year were $675,000; the goods available for sale totaled
$720,000; and the cost of goods sold totaled $635,000.
Required:
(i) Prepare a schedule of cost of goods manufactured and the cost of goods sold section of
the company's income statement for the year.
(ii) Assume that the dollar amounts given above are for the equivalent of 30,000 units
produced during the year. Compute the average cost per unit for direct materials used,
and compute the average cost per unit, for rent on the factory building.
Contd
P/3
=3=
IPE 48l(MEl
Contd ... Q. No. l(b)
(iii) Assume that in the following year the company expects to produce 50,000 units.
What average cost per unit and total cost would you expect to be incurred for direct
materials? For rent on the factory building? (Assume that direct materials is a variable
cost and that rent is a fixed cost.)
(iv) As the manager in charge of production costs, explain to the president the reason for
any difference in the average costs per unit between (ii) and (iii) above.
2. (a) What types of costs should not be assigned to products In an activity-based
costing
(6)
system?
(b) Performance Products Corporation makes two products, titanium Rims and Posts. Data
(20)
regarding the two products follow:
________________
T,.
Direct
labor-Hours
per.Unit'
,
Rims\ .._. . . . . . .
,~
,,< \,.-:,(;.:
c
•
0.40
'~.,.'~,
••
0:20
.
->, Annual
-'ProduCtion
20,000 units '
80,000 units
Rims require $17 in direct materials per unit, and Posts require $10. The direct labor wage
rate is $16 per hour. Rims are more complex to manufacture than Posts, and they require
special equipment. The ABC system has the following activity cost pools:
~
<
i.
1.".
I
,
I
--ActivityMeasure
Estimated
Overhead
Cost
Rims
Posts
, Number of setups
Machine.hours
Direct labor.hours
$21.600
$180,000
$288.000
100
4,000
8,000
80'
0
16.000
':.
';
ActivityCost Pool
fMachine'setups ............
Special processing .-: ........
Genera'! factory ............
Activity
~.~
Total
180
4,000
24.000 :
I
Required:
(i) Compare the activity rate for each activity cost pool.
(ii) Determine the unit cost of each product according to the ABC system, including
direct materials and direct labor.
(c) Olympus Products manufactures recreational equipment One of the company's products,
a skateboard, sells for $37.50. The skateboards are manufactured in an antiquated plant that
relies heavily on direct labor workers. Thus variable costs are high, totaling $22.50 per
skateboard. Over the past year the company sold 40,000 skateboards, with the following
(20%)
operating results:
Conld
P/4
=4=
Conld ... Q. No. 2fe)
• Sales (40,000 skateboards)
Variable expenses.
, Contribution margin ..
, Fixed.expenses
$1,500,000
900,000.
.
600,000
480,000
.
Net operating income.
.
I
S'
.
120,000
Required:
(i) Compute (a) the CM ratio and the break-even point in skateboards, and (b) the degree
of operating leverage at last year's level of sales,
(ii) The company estimates that variable costs will increase by $3 per skateboard next
year. If this change takes place and the selling price per skateboard remains constant at
$37,50, what will be the new CM ratio and the new break-even point in skateboards?
(iii) Refer to the data in (ii) above, If the expected change in variable costs take place,
how many skateboards will have to be sold next year to earn the same net operating
income ($120,000) as last year?
(iv) Refer again to the data in (ii) above, The president has decided that the Olympus may
have to raise the selling price of its skateboards. If Olympus Products wants to maintain
the same CM ratio as last year, what selling price per skateboard must it charge next year
to cover the increased labor costs?
(v) Refer to the original data, The company is considering the construction of a new,
automated plant. The new plant would slash variable costs by 40%, but it would cause
fixed costs to increase by 90%, If the new plant is built, what would be the company's
new CM ratio and new breakeven point in skateboards?
3, (a) Mega Feed Company manufactures and sells single product. Cost data for the product
(26%)
follow:
Variable costs per unit:
Direct materials
,
, . , .. ,
Direct labor
, .. ,
,,
Variable factory overhead
Variable selling and administrative
.
,.
,., .
.
$ 6
12
4
3
.
$25
; Fixed costs per month:
Fixed manufacturing overhead. . . . . . . . . . . ..
Fixed selling and administrative. . . . . . . . . . . .
$240,000
180,000
Totai fixed cost per month .: :, .. ' . . . . . . . . . . ..
$420,000
Total variable costs per unit
.
,
,
'-.
----------------_._---===~
i
The product sells for $40 per unit. Production and sales data for May and June, the first two
months of operations, are as follows:
Contd
PIS
=5=
IPE 48l(ME)
Contd ... Q. No. 3(a)
c~
.
'
May...
June ~.. ~.... ~.
Units
Produced
Units
Sold
30,000
30,000
26,000
34,000
Income statements prepared by the Accounting Department, using absorption costing, are
presented below:
May
Sales
~
~
,~
Costof goods sold:
Beginninginventory.... ~..... ,
Addcost ofgoods manufactured
Goodsavailableforsale
Less endinginventory.~
~
, ..
$1,040:000
~..
June
---------
--$1,360,000
.
0
900,000
120,000
900,000
~.. , .. ~~..
~
~~..
900,000
120,000
1,020,000
0
Costof goods sold . ~
~~.. ~
~
Gross margin
~. ~~
~~~.. ~. ~
! Sellingand administrativeexpenses
~
: Netoperatingincome
~
~~~..
.
780,000
.
260,000
.
. 258,000
~ $
2,000
1,020,000
340.000
282,000
$
58,000
Required:
(i) Determine the unit product cost under absorption and variable costing.
(ii) Prepare variable costing income statements for May and June using the contribution
approach.
(iii) Reconcile the variable costing and absorption costing net operating income figures.
(iv) Explain the reason behind a profit ($2,000) in the month of May, in spite of selling
less than the breakeven quantity (28,000 units).
(b) The Production Department of Walton has submitted the following forecast of units to be
(20)
produced by quarter for the upcoming fiscal year.
_._- ----_.
Units to be produced .....
----~_. -
1st Quarter
2nd Quarter
16.000
15,000
------------------
. 3rd Quarter
14,000
4th Quarter'
15,000
---
Each unit requires 0.80 direct labor-hours and direct labor-hour workers are paid $11.50 per
hour. In addition, the variable manufacturing overhead rate is $2.50 per direct labor-hour.
The fixed manufacturing
overhead is $90,000 per quarter~ The only noncash element of
manufacturing overhead is depreciation, which is $34,000 per quarter.
Required:
(i) Prepare the company's direct labor budget for the upcoming fiscal year, assuming that
the direct labor workforce is adjusted each quarter to match the number of hours required
to product the forecasted number of units produced.
(ii) Prepare the company's manufactu~ing ov~rhead budget.
Contd
P/6
.•
_= 6 =
IrE 48l(MEl
(6)
4. (a) What is meant by the term management by exception?
(10)
(b) Explain the S-curve of technological progress.
(c) What is SWOT analysis? How it can be used for analysis of the overall strategic position
(10)
of the business and its environment.
(20%)
(d) Describe the steps involved in the decision-making process with suitable example.
SECTION - B
There are FOUR questions in this Section. Answer any THREE.
5. (a) Describe Taylor's four principles of scientific management.
What were the problems
(18)
associated with implementation scientific management of Taylor?
(b) Discuss the environmental changes to be considered in management, as per contingency
(10)
theory.
(c) Describe the management functions in an organization. What are the management skills
(18%)
related to different managerial levels? Discuss in brief.
6. (a) Write down the differences between the characteristics of the mechanistic and organic
organizational design.
(10)
(b) Write a short note on any three of the following core marketing concepts:
(18)
(i) Value and Satisfaction
(ii) Marketing Channels
(iii) Marketing Environment
(iv) Market Segmentation, Market Targeting, and Market Positioning
(c) What are the requirements for successful co-branding? Describe different types of product
(18 %)
mix pricing with an appropriate example.
7. (a) Discuss the six steps of appraisal program according
to management
by objectives
(MBa) strategy.
(18)
(b) What are the seven traits associated with leadership? Discuss elaborately.
(16)
(12%)
(c) Answer the following questions in the light of "Reinforcement theory":
(i) How can engineering students be motivated to secure good grades?
(ii) How can public transport drivers be motivated to drive safely?
(18)
8. (a) What should be rated in the performance appraisal process? Discuss briefly.
(b) What are the employee responses to perceived inequities? Discuss according to "Equity
(10 %)
theory".
Contd
PI7
•
•
j
IrE 48l(ME)
Contd ... Q. No.8
(c) A company has received two alternative projects - "X" and "Y". The related cash-flows
(18)
corresponding to the projects are summarized as follows:
Project "Y"
Project "X"
I
.
i
l~
Year
0
1
2
3
4
Cash-flow
.,
-2,00,000
72,000
82,000
36,000
60,000
,
Year
0
1
2
3
4
Cash-flow
I
-2,80,000
80,000
1,00,000
1,20,000
30,000
(i) Select the preferable project usmg net present value method.
calculations.
(ii) Determine the payback period for the selected project.
------,
Show necessary
L-4/T -21ME
Date: 19/08/2017
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T-2
B. Sc. Engineering Examinations 2015-2016
Sub:
IPE 481
(Industrial Management)
Full Marks : 280
Time : 3 Hours
The figures in the margin indicate full marks.
USE SEPARATE SCRIPTS FOR EACH SECTION
SECTION -A
There are FOUR questions in this section. Answer arty THREE.
1. (a) What is finance? What are the two objectives of financial management? Explain with
examples.
(b) What are different types of financial analysis? Explain each with examples.
(c) BlueMan, Inc. wants to purchase a new ice cream truck with a cost $58,000. BlueMan
has a required rate of return of 12%. The acquisition is proposed for January 1, 2018.
BlueMan expects zero salvage value at end of its of 4 years. Buleman expects zero
salvage value at end of its useful life of 4 years. Blueman predicts the new truck will
generate net income of $6,000 and operating cash flows of $18,000 during 2018, with an
increase in net income and operating cash flow of $500 in each subsequent year.
Calculate the payback period, the accounting rate of return, internal rate of return (IRR),
and net present value (NPV). What will be the decision for each method i.e. to purchase
(20)
or not to purchase the truck?
2. (a) The following data ( in thousand of BDT) have been taken from the accounting
records of Agro Corporation 2016
Sales
900
Purchases of raw materials
200
Direct labor
200
Indirect labor and indirect material
250
Office managers salary
170
Salary for marketing force
150
Raw materials inventory, December 31, 2015
30
Raw materials inventory, January 1, 2017
20
Work in process inventory, December 31, 2015
10
Work in process inventory, January 1, 2017
60
Finished goods inventory, December 31, 2015
100
Finished goods inventory, January 1,2017
120
Required:
(10)
(i) Prepare a Schedule of Cost Goods Manufactured.
(Slj)
(Slj)
(ii) Compute the Cost of Goods Sold.
(iii) Prepare an Income Statement.
·
Contd
P/2
=2=
IPE 481 (ME)
Contd ... Q. No.2
(b) Explain with examples the following terms and their significance in decision making:
(i) Opportunity cost
(5)
(ii) Sunk cost
(5)
(iii) Differential cost
(5)
(iv) Differential revenue
(5)
3. (a) A Jewelry Corporation manufactures custom jewelry. In the past, it has been using a
traditional overhead allocation system based solely on direct labor hours. Sensing that
this system was distorting costs and selling prices. The corporation has decided to switch
to an activity-based coasting system using three activity cost pools. Information on these
activity cost pools are as follows:
Activity cost pool
Estimated Activity
Estimated Overhead Cost
Labor related
5000 direct labor hours
40,000 BDT
Machine related
6,250 machine hours
25,000 BDT
Quality control
800 number of inspection
16,000 BDT
Job # 101 incurred $800 of direct material, 50 hours of direct labor at $40 per hour, 90
machine hours, and 9 inspections.
Required:
(13/j )
(i) What is the cost of the job under the activity-based costing system?
(ii) Relative to the activity-based costing system, would Job # 101 have been over-
(13/j)
costed or under-costed under the traditional system and by how much?
(b) Fraser Company, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
Units in beginning inventory
145 BDT
o
Units produced
1,200 units
Units sold
1,000 units
Units in ending inventory
200 units
Variable costs per unit:
Direct materials
33 BDT
Direct labor
52 BDT
Variable manufacturing overhead
1 BDT
Variable selling and administrative
7BDT
Fixed costs:
Fixed manufacturing overhead
$38,400 BDT
Fixed selling and administrative
$4,000 BDT
Contd
P/3
=3=
IPE 481 (ME)
Contd ... Q. No. 3(b)
Required:
(i) Prepare an income statement for the month using the contribution format and the
variable costing method.
(8)
(ii) Prepare an income statement for the month using the absorption costing method.
(8)
(iii) Is there an income difference between the above methods? If yes, how much and
(4)
why?
4. (a) Cash budget by quarters is given below for a company (000 omitted). The company
requires minimum cash balance of at least $5,000 to start each quarter.
Quarter
I
2
3
4
Year
Cash balance, beginning
6
?
?
?
?
Add collections from customers
?
?
96
92
323
Total cash available
71
?
?
97
?
35
45
?
35
?
Operating expenses
?
30
30
?
113
Equipment purchases
6
6
8
?
36
Dividends
4
4
2
2
?
Total disbursements
?
85
?
72
?
(2)
?
II
?
?
Borrowings
?
15
0
0
?
Repayments (including interest)
0
0
(?)
(17)
(?)
Total financing
?
?
?
?
?
Cash balance, ending
?
?
?
?
?
Less disbursements:
Purchase of inventory
Excess (deficiency) of cash available over disbursements
Financing:
Interest expense amounts 1000 for the year
Required:
(34)
Fill in the missing amounts in the above table.
(b) Marks Company is the exclusive distributor for an automotive product that sells for
$50 per unit and has a CM ratio of 40%. The company's fixed expenses are $200,000 per
year.
Required:
Using the contribution margin method:
(4)
(i) What is the break-even point in units and sales dollars?
(ii) What sales level in units and in sales dollars is required to earn an annual profit of
(4)
$80,000?
(iii) Assume that by using a more efficient shipper, the company is able to reduce its
variable expenses by $4 per unit. What is'the company's new break-even point in
units and sales dollars?
Contd
P/4
'-
•
•
=4=
IPE 481 (ME)
SECTION -B
There are FOUR questions in this section. Answer any THREE.
5. (a) Define management. Explain the four basic functions of management.
(20%)
(b) What is innovation cycle? Describe different stages of S-curve for technological progress.
(16)
(c) Mention different roles of managers according to Henry Mintzberg.
(10)
6. (a) Explain different elements of bureaucracy model of Max Weber.
(b) Briefly explain the advantages of delegation process.
(16)
(10)
(c) Mention the relative advantages and disadvantages of different performance appraisal
methods.
7. (a) Depict the functions of human resource management in a neat flow chart.
(b) Explain the expectancy theory of motivation.
(20%)
(10%)
(16)
(c) Mention the factors which determine the width of span for an organizational structure.
Differentiate functional organizational structure from the dedicated structure along with
their relative advantages and disadvantages.
8. (a) Explain the factors which influence the consumer behavior.
(20)
(20%)
(b) What are the critical factors of management of technology? How does the knowledge
gap affect the price of the technology?
(16)
(c) Why demographic "environment is crucial in marketing analysis? Describe.
(10)
L-4/T -2/ME
Date: 24/0112017
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T-2
B. Sc. Engineering Examinations 2014-2015
Sub:
IPE 481 (Industrial
Management)
Full Marks: 280
Time: 3 Hours
The figures in the margin indicate full marks.
USE SEPARATE SCRIPTS FOR EACH SECTION
SECTION"-A
There are FOUR questions in this section. Answer any THREE.
(11 p.j')
1. (a) Describe differential, opportunity and sunk cost with appropriate examples.
(b) Parker Company produces an inkjet printer that sells for $150 and a laser printer that
sells for $350. The management of Parker Company would like to use activity-based
costing to £llocate overhead. The following estimates are for the activities and related
135)
cost drivers identified as having the greatest impact on overhead costs.
Activity
Cost Driver
Production runs
Quality inspections
Packaging and
shipping
Total
Number of
production runs
Inspection hours
Number of units
shipped
Estimated
Overhead
Costs
$ 400,000
Estimated Cost Driver Activity
Total
Inkjet
Laser
40
10
50
250,000
1,200
2,800
4,000
400,000
12,000
4,000
16,000
$ 1,050,000
Required:
(i) Calculate the direct materials and direct labor cost per unit for each product.
(ii) Using the activity-based costing method, calculate the activity rates and allocate
overhead to each product. Determine the overhead cost per unit.
(iii) What is the product cost per unit for the inkjet and laser products? Calculate the
per unit profit for each prod~ct using the activity-based costing approach.
2. (a) Denton Company manufactures and sells a single product. Cost data for the product
(2
are given below:
Variable costs per unit:
Direct materials
$7
Direct labor
10
Variable manufacturing overhead
5
Variable selling and administrative
3
Total variable cost per unit
$ 25
Fixed costs per month:
Fixed manufacturing overhead
$315,000
Fixed selling and administrative
245,000
Total fixed cost per month
$ 560,000
The product sells for $60 per unit. Production and sales data for July and August, the first
two months of operations, follow:
Contd
P12
.%)
..
=2=
IPE 481/ME
Contd ... Q. No. 2(a)
Units Sold
Units Produced
The company's
July
17,500
15,000
August
17,500
20,000
Accounting
Department
has prepared
absorption
costing
income
statements for July and August as presented below:
July
August
$900,000
$1,200,000
Cost of gods sold
600,000
800,000
Gross margin
300,000
400,000
Selling and administrative expenses
290,000
305,000
Net operating income
$ 10,000
$ 95,000
Sales
Required:
(i) Determine the unit product cost under:
• Absorption costing .
• Variable costing.
(ii) Prepare contribution format variable costing income statements for July and August.
(iii) Reconcile the variable costing and absorption costing net operating income figures.
(b) Heady Company sells headbands to retailers for $5. The variable cost of goods sold
per headband is $1, with a selling commission of 10 percent. Fixed manufacturing costs
total $25,000 per month, while fixed selling and administrative costs total $10,000. What
is the break-even point (in units and sales dollars) in headbands? Determine the units to
be sold and sales dollars necessary
to generate an income of $3,500 using the
contribution margin approach.
(16)
(c) Briefly describe the key factors of budgetary control.
hO)
3. (a) You have been asked to prepare a December cash budget for Ashton Company,
distributor of exercise equipment. The following information
a:
is available about the
company's operations:
(28~)
(i) The cash balance on December 1 is $40,000.
(ii) Actual sales for October and November and expected sales for December are as
follows:
October
Cash sales
Sales of account
November
December
$65,000
$70,000
$83,000
$400,000
$525,000
$600,000
Sales on account are collected over a three-month period as follows: 20% collected in
the month of -sale, 60% collected in the month following sale, and 18% collected in
the second month following sale. The remaining 2% is uncollectible.
Contd
P/3
=3=
IPE 481/ME
Contd ... Q. No. 3(a)
(iii) Purchases of inventory will total $280,000 for December. Thirty percent of a
month's inventory purchases are paid during the month of purchase. The accounts
payable remaining from November's inventory putchases total $161,000, all of which
will be paid in December.
(iv) Selling and administrative expenses are budgeted at $430,000 for December. Of
this amount, $50,000 is for depreciation.
(v) A new Web server for the Marketing Department
costing $76,000 will be
purchased for cash during December, and dividends totaling $9,000 will be paid
during the month.
(vi) The company maintains a minimum cash balance of $20,000. An open line of
credit is available from the company's bank to bolster the cash position as needed.
Required:
(I) Prepare a schedule of expected cash collections for December.
(II) Prepare a schedule of expected cash disbursements for merchandise purchases for
December.
(III) Prepare a cash budget for December. Indicate in the financing section any
borrowing that will be needed during the month. Assume that any interest will not be
paid until the following month.
(b) Marvel Parts, Inc., manufactures auto accessories. One of the company's products is a
set of seat covers that can be adjusted to fit nearly any small car. The company has a
standard cost system in use for all of its products. According to the standards that have
been set for the seat covers, the factory should work 2,850 hours each month to produce
(18)
1,900 sets of covers. The standard costs associated with this level of production are:
Total
Direct materials
$42,560
Per Set
of Covers
$22.40
Directlabor
$17,100
9.00
$6,840
3.60
Variable manufacturing overhead
(based on direct labor-hours)
$35.00
During August, the factory worked only 2,800 direct labor-hours and produced 2,000 sets
of covers. The following actual costs were recorded during the month.
Total
Direct materials (12,000 yards)
$45,600
Per Set
of Covers
$22.80
Direct labor
$18,200
9.10
$7,000
3.50
Variable manufacturing overhead
$35.40
At standard, each set of covers should require 5.6 yards of material. All of the materials
purchased during the month were used in production.
Contd
P/4
=4=
IPE 481/ME
Contd ... Q. No. 3(b)
Required: Compute the following variances for August:
(i) The direct materials price and quantity variances.
(ii) The direct labor rate and efficiency variances.
(iii) The variable overhead rate and efficiency variances.
4. (a) What is KPIs? Give some example of Business KPIs.
(b) Differentiate
managerial
and financial accounting. What are mam objectives of
(14)
financial accounting?
(c) A corporation is considering replacing an existing machine with a new machine. The
new machine costs $60,000 plus installation costs of $2,000. It will generate revenues of
$155,000 annually and cash expenses annually of $100,000. It will be depreciated to a
salvage of $6,000 over a seven-year life using the straight-line method. The old machine
has a book value of $40,000 and a remaining useful life of 5 years. It can be sold
immediately for $15,000. If retained, the machine will generate revenues of $150,000 and
cash expenses annually of $11 0,000. If the discount rate is 12% what should be the
choice? The choice is either keeps the existing machine for five years or buys the new
(20)
machine and run it for seven years.
SECTION -B
There are FOUR questions in this section. Answer any THREE.
5. (a) Explain different elements of bureaucracy model of Max Weber.
(20~)
(b) Briefly explain the pre-requisites of delegation process.
(16)
(c) Mention different roles of managers according to Henry Mintzberg.
(10)
6. (a) If a company is experiencing a severe financial crisis, which competitive strategy
would you suggest to implement and why? Explain in detail.
(16)
(b) Differentiate bounded rationality from rationality.
(10)
(c) Write in details about different boundaryless organizations.
(20~)
(16%)
7. (a) Explain the expectancy theory of motivation.
(b) Depict a practical scenario where performance simulation is more appropriate than
conventional written examination as a selection device.
(10)
(c) What is innovation cycle? Describe different stages of S-curve for technological progress.
(20)
8. (a) Explain the factors which influence the compensation and benefits of employees in an
organization.
(20~)
(b)Mention different patterns of target market selection with appropriate examples.
(16)
(c) How does the knowledge gap affect the price of the technology? Discuss.
(10)
(
L-4/T-2/ME
Date: 04/02/2016
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T-2
B. Sc. Engineering Examinations 2013-2014
Sub:
IPE 481
(Industrial Management)
Full Marks: 280
Time: 3 Hours
The figures in the margin indicate full marks.
USE SEP ARA TE SCRIPTS FOR EACH SECTION
SECTION -A
There are FOUR questions in this section. Answer any THREE.
1. (a) Differentiate
product
and period
costs with examples.
Write
short notes on
(6+10)
manufacturing and non-manufacturing costs.
(8
(b) Explain the significance of the analysis of mixed costs.
X)
(c) Company M manufactures a wide range of products at several plant locations. The
plant in Dhaka, which manufactures home appliances, has been experiencing difficulties
with fluctuating monthly overhead costs. The fluctuations have made it difficult to
estimate the level of overhead costs that will be incurred for anyone month. Management
wants to be able to estimate overhead costs accurately in order to better plan its
operational and financial needs. The company have identified that overhead costs in the
plant in Dhaka tends to vary with machine hours. They want to analyze the behavior of
overhead costs with respect to machine hours. Data on machine hours and associated
(22)
overhead costs for the last year are given below: .
Month
Machine Hours
Overhead Costs
January
22,450
$86,000
February
26,000
98,900
March
32,450
120,500
April
35,100
137,000
May
43,460
187,500
June
20,500
77,500
July
12,380
69,500
August
31,590
119,500
September
45,870
210,900
October
27,900
107,000
November
10,670
65,500
December
39,600
160,000
(i) Using the least-square method, determine the cost formula for overhead costs of the
plant in Dhaka.
(ii) For anyone month, machine hours in the plant in Dhaka are estimated to be 49,600
hours. What will be the expected overhead costs?
Contd
P/2
=2=
IPE 481/ME
2. (a) Angie Silva has recently opened The Sandal Shop, a store that specializes in fashionable
sandals. Angie has just received degree in business from state university, and she is anxious
to apply principles she has learned to her business. In time, she hopes to open a chain of
(36.73')
sandal shops. As a first step, she has prepared the following analysis for her new store:
Selling Price per pair of sandals
$40
Variable expense per pair of sandals
$16
Fixed expenses per year:
Building rental
$15,000
Equipment depreciation
$7,000
Selling
$20,000
Administrati ve
$18,000
(i) How many pairs of sandals must be sold each year to break even? What does this
represent in total dollar sales?
(ii) Prepare a CPV graph for the store from a zero level of activity up to 5,000 pairs of
sandals sold each year. Indicate the break-even point in the graph.
(iii) Angie has decided that she must earn at least $18,000 for the first year to justify her
time and effort. How many pairs of sandals must be sold to reach the targeted profit?
(iv) Angie now has two salesperson working in the store - one full time and one part
time. It will cost her an additional $8,000 per year to convert the part-time position to a
full-time position. Angie believes that the change would bring in an additional $25,000 in
sales each year. Should she convert the position?
(v) Refer to the original data, during the first year, the store sales 3,000 pairs of sandals.
Determine the net income and store's degree of operating leverage.
(vi) A customer has offered to make a bulk purchase of 1000 pairs per month on a special
price basis. Variable expense of $1 could be avoided in this sale. What price should Angie
offer to the customer to make an overall net income of $30,000 as a whole? (normal sales
would not be affected by this order and assume amount of normal sales as in part (v».
(10)
(b) Explain the importance ofCVP analysis.
(6)
3. (a) Write short note on 'Time value of money'.
(b) The company G prepares its master budget on a quarterly basis. The following data have
(40.73')
been estimated to assist in preparation of the master budget for the first quarter of2016:
- As of December 2015, the company's general ledger showed the following account balance:
Debits
Cash
Accounts Receivables
Inventory
Plant and Equipment
Credits
$48,000
$224,000
$60,000
$370,000
Accounts Payable
' $93,000
Capital Stock
$500,000
Retained Earnings
$109,000
$702,000
$702,000
Contd
P/3
=3=
IPE 481/ME
Contd ... Q. No. 3(b)
- Actual sales for December and budgeted sales for the next four months are as follows:
December
$280,000
January
$400,000
February
$600,000
March
$300,000
April
$200,000
- Sales are 20% for cash and 80% on credit. Payments are collected in the following month
of sales. Accounts receivables at December 31 are a result of December credit sales.
- The company's gross profit rate is 40% of sales.
- Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month;
advertising, $70,000 per month; freight-out, 5% of sales; depreciation,
$14,000 per
month; other expenses, 3% of sales.
- At the end of each month, inventory is to be on hand equal to 25% of the following
month's sales needs, stated at cost.
- 50% of a month's inventory purchase is paid for in the month of purchase; the other
50% is paid for in the following month.
- During February, the company will purchase a new copy machine for $1,700 cash.
During March, other equipment will be purchased for cash at a cost of $84,500.
- During January, the company will declare and pay $45,000 in cash dividend.
- The company must maintain a minimum cash balance of $30,000. An open line of
credit is available at a local bank for any borrowing that may be needed during the
quarter. All borrowing is done at the beginning of a month, and all repayments are made
at the end of a month. Borrowings and repayments of principals must be in multiples of
$1,000. Interest is paid only at the time of payment of principal. The interest rate is 12%
per year. (Figure interest on whole month, e.g., 1/12,2/12.)
Using the data above, complete the following statements and schedules for the first
quarter of 2016:
(i) Schedule of expected cash collections:
January
Cash Sales
$80,000
Credit Sales
$224,000
Total Cash Collections
$304,000
February
March
Quarter
(ii) Inventory purchase budget:
January
February
Budgeted cost of goods sold
$240,000
$360,000
Add: Desired ending
inventory
Total needs
$90,000
Deduct: Beginning
inventory
Required purchase
March
Quarter
$330,000
$60,000
$270,000
For January sales: $400,000 sales * 60% = $240,000; $360,000* 25% = $90,000.
Contd
P/4
=4=
IPE 481/ME
Contd ... Q. No. 3(b)
(iii) Schedule of cash disbursements for purchases:
January
December purchase
$93,000
January purchase ($270,000)
$135,000
February
March
Quarter
February
March
Quarter
February
March
Quarter
$135,000
February purchase
March purchase
Total cash disbursements
$228,000
(iv) Schedule of cash disbursements for expenses:
January
Salaries and wages
$27,000
Advertising
$70,000
Freight-out
$20,000
Other expenses
$12,000
Total cash disbursements
$129,000
(v) Cash budget:
January
Cash balance, beginning
$48,000
Add cash collections
$304,000
Total cash available
$352,000
Less disbursements
Purchase inventory
$228,000
Operating expenses
$129,000
-
Purchase of equipment
Cash dividends
$45,000
Total disbursements
$402,000
Excess (deficiency) of cash
(52,000)
Financing
(vi) Prepare an income statement for the quarter ending March 31, 2016 (Ignore income taxes).
(vii) Prepare a balance sheet as of March 31, 2016.
4. (a) Define different components of demand. Define and explain two measurements of errors.
(5+5)
(b) Forecast including trend for the month of December was 630 units. Trend effect was
25 units. But, the actual demand turned out to be 650 units. Calculate forecast including
(14)
trend for the month of January. The values of a and 8 are 0.80 and 0.30 respectively.
(c) A company is planning to replace an existing manual machine with a new CNC machine.
(22
The related financial data from the finance and production departments are given below:
Purchase price of the new CNC machine = Tk 50 lacs, Annual maintenance cost = Tk.
1.2 lacs, Increase in profit
=
Tk. 7 lacs (From year 2 to 8), Tk.. 10 lacs (From year 9 to
h
15). Tk. 8 lacs (From year 16 to 20), Repair cost at 1 d year = Tk. 5 lacs, Salvage value
= Tk. 15 lacs, Required rate of return = 10%.
Contd
P/5
X)
•
+
=5=
IPE 481/ME
SECTION -B
There are FOUR questions in this section. Answer any THREE.
5. (a) Define management. Explain the four management functions.
(b) Briefly describe the five bases of power. Mention the advantages of delegation.
(c) Differentiate mechanistic
and organic organizational
(14%)
(8+7)
structure. Describe different
types of boundary less organizations with appropriate examples.
(5+12)
6. (a) What are the 14 principles of management according to Henri Fayol? Explain.
(b) Show the decision making process using a neat flow chart. Differentiate between
rationality and bounded rationality.
(8+7)
(c) Define self-actualization. Write short note on Maslow's need theory. Give a practical
example that violates Maslow's need theory of hierarchy.
7. (a) Explain the expectancy theory of motivation.
(b) Write short notes on SWOT analysis and BeG matrix.
(15)
(12%)
(7+ 10)
(c) Mention the relative advantages and disadvantages of different performance appraisal
methods. Briefly describe any three selection devices.
8. (a) Explain the six environmental forces in marketing management.
(b) Describe the factors which influence consumer behavior.
(10+7)
(16%)
(15)
(c) Mention the factors which determine the width of span for an organizational structure.
Explain five competitive forces in industry.
(5+ 10)
L-4/T-2/ME
Date: 02/07/2015
BANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T-2
B. Sc. Engineering Examinations 2012-2013
Sub:
IPE 481 (Industrial
Management)
Full Marks : 280
Time: 3 Hours
The figures in the margin indicate full marks.
USE SEPARATE SCRIPTS FOR EACH SECTION
SECTION-A
There are FOUR questions in this Section. Answer any THREE.
1. (a) "Holding cost and Setup cost are fairly insensitive to lot size" Justify this statement
(12)
mathematically in case ofEOQ model.
(b) Briefly explain the "Power of 2" policy and show that in this policy maximum
(12)
possible error in cost will be only 6% compared to the standard EOQ model.
(c) Write down the limitations
of standard EOQ model. Obtain the equation for
determining the "Economic production quantity" in case of "Production order quantity
(4+6=10)
model".
(d) An item sells for $25 a unit, but a 10% discount is offered for lots of 150 units or
more. A company uses this item at the rate of 20 units per day. The setup cost for
ordering a lot is $ 50 and the holding cost per unit per day is $ 0.30. The lead time is 12
days. Determine optical inventory policy.
2. (li) The following matrix represents the time needed by a particular operator to work on a
particular mlc. Please assign operator to mlc such that total time is minimized. (An
(15;;;)
operator can only be assigned to a single mlc)
1
2
3
4
1
90
75
75
80
2
35
85
55
65
3
125
95
90
105
4
45
110
95
115
Operator-M/C
(b) Use Johnson's
rule to obtain the optimum sequence, total processing
time and
(15)
machine idle time for processing the following 5 jobs in two machines A and B.
Job
a
b
c
d
e
Machine-A
2.50
3.80
2.20
5.80
4.50
Machine-B
4.20
1.50
3.00
4.00
2.00
(c) "Aggregate Planning is a big picture approach". Justify this statement. Briefly explain
two demand options and three capacity options in aggregate planning.
(4+12=16)
.,
•
<'"
••
=2=
IPE 481
3. (a) Briefly explain the qualitative methods of forecasting with their merits and demerits.
(12)
(b) A manager is trying to determine which forecasting method to use. Based upon the
following historical data, calculate following:
Month
1
2
3
4
5
6
Actual demand
62
65
67
68
71
73
(i) Calculate 3 month weighted moving average forecast using weights of 0.50, 0.30
(6)
and 0.20 for periods 4-6.
(ii) Calculate single exponential smoothing forecast for periods 2 - 6 using an initial
(8)
forecast (Fi) of61, and an a of 0.30.
(iii) Calculate exponential smoothing with trend forecast for period 2-6 using initial
trend forecast (Ti) as 1.8 and initial exponential smoothing forecast (F1) of 61, a of
(10)
0.30 and ~ of 0.70.
(iv) Calculate MAD for, the forecast made by above (ii) and (iii) technique in periods
(10%)
4-6. Which forecasting method do you prefer and why?
(15)
4. (a) Briefly describe Michel Porter's five force modal with appropriate examples.
(b) What are the competitive strategies that can be followed by the market leaders?
(16%)
Elaborate with suitable examples.
(c) Briefly describe the scope of marketing. Write down different demand states with
(7+8=15)
appropriate examples.
SECTION -B
There are FOUR questions in this Section. Answer any THREE.
(2)
5. (a) Define Incremental cost and Inventoriable cost.
(b) Company X has two departments, milling and assembly. The company has a joborder costing system and computes a predetermined overhead rate in each department.
The milling department bases its rate on machine-hours
and the assembly department
bases its rate on direct labor cost. At the beginning of the year, the company made the
(18%)
following estimates:
Contd
P/3
=3=
IPE 481
Contd ... Q. No. 5(b)
._-_._--
--_._----
-----
, ,'-D;p'~rtment--:':
'c
»..,'~(~~o~>.f~~i~~~
lSO'OOO """$000'
'.>$5~~1gg:~U;~l~~g~i
Now,
1. Compute the predetennined overhead rate to be used in each department.
2. Assume that the overhead rates computed in (1) above are in effect. The job costsheet for job 407 which was started and completed during the year, showed the
following:
-----~-----.
.~' .<: ,/~., ..
....
;<:i~{-:'::"'/.\,.:.(~"-.:.:.:.::-,',',.'."',.' ,:','
-"-:-.. ---.:---'--
I
'
:;::::';~~:=.':-:~;: "::;;i:'~;
~:~::;<';:~~;":;;"-q:,
,':~~~
iaIJ~c~ilabQr-:t1bilirs':,.•••,.
/',
"
Compute the total overhead cost applied to job 407.
(c) Define POHR. Solex company produces a high-quality insulation material that passes
through two production processes. A quantity schedule for June for the first process
(2+ 18)
followings:
,",
,
,"
.
..,,:,Qu~,ntity
t: .."_
~~~I~~~~~l~~11~~~jlj~~~;~i!
:,'", 'complet ;,(;onversion4()%':cbmplete)<.
7
•.',S!arted::intoJ>roductiop,::
.,10:::''':::''
Totalunj~st9ibe'accoGnted'for..
.
'.
...,~80;obo
340;000'
.. .
"
. .':}:,~.;.~
. . ';..:C -,' ~.: .. ;
,.,>,",
,~
:
....
','.
,
.
: Equiv,alenlUnits
;'
,
"'.
.'60;000'
.'..
';',
Ma.eri~ds';Collver~ion
Uhit~'.Jg6;ddht~d
••.•
f8r,.~~
.•'f6Hb~~.:':
••...
i..•.
"'"•. ,;'.,':
,.;; ;:".(;.......•...
.
Transfim~dto,thehext
i
pr6cess .".',
Worki". proc~ssiJune30{materJaIS50%
..•..
','>
I . ..compiete;c~mverSj,On25%COmPlete};.'
: To~~..u.~(tS.;(l~co,.@te~;f~~.:.,:..;1:,~:;.:'
...;,;.,.•...'~;....
40,000
~.j?~?40jOOO
..•....
,(!;••..
Costs in the beginning work in process inventory of the first processing department were:
materials,
$56,000; and conversion
cost, $14,900. Costs added during June were:
materials, $385,000; and conversion cost, $214,500.
Contd
P/4
=4=
IPE 481
Now:
1. Assume that, the company uses the weighted-average
method of accounting for
units and costs. Determine the equivalent units for June for the first process.
2. Compute the costs per equivalent unit for June for the first process.
3. Complete the cost reconciliation for the first process.
(6)
(d) Distinguish between discretionary fixed cost and step-variable cost.
6. (a) Sebolt wire company heats copper ingots to very high temperatures by placing the
ingots in a large heating coil. The heated ingots are then run through a shaping machine
that shapes the soft ingot into wire. Due to the long heat-up time, the coil is never turned
off. When an ingot is placed in the coil, the temperature is raised to an even higher level,
and then the coil is allowed to drop to the "waiting" temperature
between ingots.
Management needs to know the variable cost of power involved in heating an ingots.
Management needs to know the variable cost of power involved in heating an ingot and
the fixed cost of power during "waiting" periods. The following data on ingots processed
(10)
and power costs are available:
I
I
Month
January
February
March
April
May
June
July
August
September
October
i
Ingots
Power Cost ($)
110
90
80
100
130
120
70
60
50
40
5500
4500
4400
5000
6000
5600
4000
3200
3400
2400
I
,
Using the least square regression method, estimate a cost formula for power cost.
(b) Far North Telecom, Ltd., of Ontario, has organized a new division to manufacture and
(20%)
sell specialty cellular telephones. The division's monthly costs are shown below:
-------------------~----------------
Manufactutingcosls:
Varia:ble costs per unit
_
Direct-matedals
.-..........•........... _.•.-.......•... _...! "~-_'~"";•••••••••; •••••
Variable mal1ufacturing
Fixed manufacturing
overhead
overhead
$2
~"'.' ..•.•..................
costs (total)
.
Selling and administrative costs:
Variable -;
,
_
"' ...................•..•.................•
Fixed (total) --.. ;
_..............•. -.,-._ "...........•....._........•.........• -. .- .
-------"".
-$48
-$360,000
-12% of sales
$470,000
--~-------------------------Contd
PIS
=5=
IPE 481
Contd ... Q. No. 6(b)
The company includes its labor costs in its fixed manufacturing overhead.
The cellular phones sell $ 150 each. During the first month of operations, the following
activity was recorded:
Units produced ...
Units sold ...
12,000
10,000
(i) Compute the unit product cost under:
(a) Absorption costing
(b) Variable costing
(ii) Prepare an absorption costing income statement for the first month of operation.
(iii) Prepare a contribution format income statement for first month using variable
costing.
(c) Define degree of operating leverage. Stratford Company distributes a lightweight
lawn chair the sells for $ 15 per unit. Variable costs are $6 per unit and fixed costs total
(2+ 14)
$180,000 annually.
Answer the following independent questions
1. What is the product's CM ratio?
2. Use the CM ratio to determine the break-event point in sales dollars.
3. The company estimate that, sales will increase by $45,000 during the coming year
due to increased demand. By how much should net operating income increase?
4. Assume that the operating results for last year were as follows:
a. Compute the degree of operating leverage at the current level of sales.
b. The president expects sales to increase by 15% next year. By how much should
net operating income increase?
5. Refer to the original data. Assume that, the company sold 28,000 units last year.
The sales manager is convinced that, a 10% reduction in the selling price, combined
with a $70,000 increase in advertising expenditures, would cause annual sales in units
to increase by 5%. Prepare an income statement showing what the results of
operations would be if these changes were made.
Contd
P/6
IPE 481
7. (a) Explain how the existence of inventory creates discrepancy between the net operating
income of absorption costing and that of variable costing.
(5)
(b) Discuss the limitations of Activity-Based-Costing.
(8)
(c) Explain "Validity" and "Reliability" of employee selection tool with examples.
(d) Discuss the performance appraisal methods with their advantages and disadvantages.
(e) Briefly explain the environmental factors affecting HRM.
(10%)
(15)
(8)
8. (a) Describe Maslow's need theory. Explain how this theory can be used to motivate a
lower class employee and an executive officer.
(b) Discuss the Fiedler Model of leadership.
(c) Explain Equity theory of motivation.
(15)
(16%)
(15)
L-4/T-2/ME
Date: 07/06/2014
rBANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY, DHAKA
L-4/T -2
B. Sc. Engineering Examinations 2011-2012
Sub:
IPE 4'81 (Industrial
Management)
Full Marks: 280
Time: 3 Hours
The figures in the margin indicate full marks.
USE SEPARATE SCRIPTS FOR EACH SECTION
SECTION-A
There are FOUR questions in this section. Answer any THREE.,
1. (a) What do you mean by. management? According to Henry Mintzberg, what roles do
(15)
managers play in an organization? Classify these roles in three general categories.
(b) What are the contributions by Frederick W. Taylor in Scientific Management School?
Mention the limitations of his theory?
(15)
(c) Describe ~awthorne experiment and its outcomes.
(16r; )
(10)
2. (a) What are the two things that needed to be kept in mind during organizational design?
(b) Write short notes on Joan Woodward's Task technology approach for organizational
design.
(10)
(c) What do you mean by recruitment and hiring? Describe a common hiring procedure.
(1Sr;)
(d) What types of errors may be happened in performance appraisal? Explain.
(11)
3. (a) What do you mean by formal authority? What is the difference between classical view
and acceptance view of fomial authority?
(15)
(b) What are the prerequisItes of authority delegation? Describe the steps of delegation.
(15)
(c) Classify formal teams. Describe the stages of a team development.
(16r;)
4.~ (a) Describe Maslow's need theory. How this theory can be used for motivating a needy
low salaried employee and a highly
, paid executive officer? Write the differences between
(15)
ERG need theory and Maslow's need theory.
(b) What amendments have been made in Taylor's differential piece work wage plan to
formulate Merrick's multiple differential piece work wage plan? Why these amendments
(15)
were made?
(c) For worker, working in a machine shop, the following data is given. Guaranteed base rate
= Tk.
50 per hour. Total piece to be produced = 400 pieces. Standard task = 200 pieces/hour,
Low task would be 80% of the standard task. The worker took 4 hours to complete the
job. Percentage of the workers' share in the gain of above task is 30%. Hence c~ilculate
(16
the rate of earning and rate of incentive per hour for the worker, using Halsey plan.
Contd
"".
':.,
l..
:3~t
I
P/2
r;)
=2=
IPE 481 (MEl
SECTION-B
There are FOUR questions in this section. Answer any THREE.
(2+ 18)
5. (a) Define Prime cost and Conversion cost.
High Desert Potteryworks makes a variety of pottery products that it sells to retailers such
as Home Depot. The company uses a job-order costing system in which predetermined
overhead rates are used to apply manufacturing overhead cost to jobs. The predetermined
overhead rate in the Molding Department is based on machine-hours, and the rate in the
. Painting Department is based on direct labor cost. At the beginning of the year, the
company's management made the following estimates:
Department
Direct labor-hours ...............................................•........
Machine-hours .........................•...................................
Direct materials cost
:
.
Direct labor cos.t
.
Manufacturing overhead cost
" ..
Molding
Painting
12,000
70,000
$510,000
$130;000
$602,000
60,000
8.,000
$650,000
$420,000
$735,000
The following information pertains to Job 205, which was started on August 1 and
completed on August 10.
Department
Molding
Direct labor-hours
,
M.achine.hours
Materials placed into production
Direct labor cost
~
.
.
.
.
Painting
30
85
110
20
$470
$332
$290
$680
Now:
(i) Compute the predetermined overhead rate used during the year in the Molding
Department and Painting Department.
(ii) Compute the total overhead cost applied to Job 205.
(iii) What would be the total cost recorded for Job 205?
(673')
(b) What are the differences between step-variable cost and discretionary fixed cost?
(c) Selected account balances for the year ended December 31 are provided below for
(20)
Superior Company:
Selling and administrative salaries
.
Purchases of raw materials
.
Direct labor
.
Advertising expense ...............................•................
Manufacturing overhead
.
Sales commissions
.
$110,000
$290,000
?
$80,000
$270,000
$50,000
Contd
'J
P/3
.
•
-
=3=
<,
IPE 481 (ME)
Contd ••• Q. No. S(c)
Inventory balances at the beginning and end of the year were as follows:
Raw materials
Work in process
Finished goods
:;
Beginning -of
the Year
End of '
the Year
$401000
$101000
?
$50,000
$35.000
?
.
.
.
The total manufacturing costs for the year were $683,000; the goods available for sale)
totaled $740,000 and the cost of goods sold totaled $660,000 .
. Now:
. (i) Prepare a schedule of cost of goods manufactured and the cost of goods 'sold
section of the company's income statement for the year.
(ii) Assume that the dollar amounts given above are for the equivalent of 40,000 units
produced during the year. Compute the average cost per unit for direct materials used
and the average cost per unit for manufacturing overhead.
(iii) Assume that in the follo'0-ng year the company expects to prod'uce '50,000 units
and manufacturing overhead 'is fixed. What average cost per unit and total cost would
you expect to be incurred for direct materials? For manufacturing overhead?
6. (a) Far North Telecom, Ltd., of Ontario, has organized a new division to manufacture and
(20
sell specialty cellular telephones. The division's monthly costs are shown below: -
Manufacturing costs:
Variable costs per unit:
Direct materials
Variable manufacturing overhead
;
Fixed manufacturing overhead costs (total)
Selling and administrative costs:
VariablE;J.....•.....................;
Fixed (total)' ...•••......-
,..................•.....
.
.
:..........•............................
:...............•..•............
%)
$48
$2
$360,000
12% of sales
$470,000
The company includes its labor costs in its fixed manufacturing overhead. The cellular
phones sell for $150 each. During the first month of operations, the following activity
was recorded:
Units produced
.
12,000
Units sold
.
10,000
Contd
P/4
- I
"
=4=
IPE 481 (ME)
Contd ... Q. No. 6(a)
(i) Compute the unit product cost under:
(a) Absorption costing
(b) Variable costing
(ii) Prepare an absorption costing income statement for the first month of operation .
.(iii) Prepare a contribution format income statement for first month using variable
costing.
(b) Define degree of operating leverage. The Shirt Works sells a large variety oftee shirts
and. sweatshirts .. Steve Hooper, the .owner, is thinking of expanding his sales by hiring
local high school students; on a commission basis, to sell sweatshiJ;1s bearing the name
(20)
and mascot of the local high school.
These sweatshirts would have to be ordered from the manufacturer six weeks in advance,
and they 'could not be returned because of the unique printing ~equired. The sweatshirts
would cost Mr. Hooper $8 each with a minimum order of 75 sweatshirts. Any additional
sweatshirts would have to be ordered in increments of75.
Because Mr. Hooper's plan would not require any additional facilities"the
only costs
"associated with the project would be the costs of the sweatshirts and the costs of the sales
commissions. The selling price of the sweatshirts would be $13.50 each. Mr. Hooper
would pay the students a commission of $1.5 for each shirt sold.
(i) To make the project worthwhile, Mr. H09per would require a $1,200 profit for the
first three months of the venture. What level. of sales in units and in dollars would be
requited to reach this target net operating income?
.
(ii) Assum.e that the venture is undertaken and an order is p~aced for 75 sweatshirts.
.
What would be Mr.. Hooper's break-even point in unit and in sales dollars? Show
computations and explain the reaSoning behind your ansyver.
(6)
(c) Discuss the limitations of Activity-Based Costing.
7. (a) Advanced Products Corporation has supplied the following data from its activity-
(20) ,
based costing system:
Overhead C.asts
Wa.ges a.nd salaries
Other overhead Costs
Total overhead costs
:
.
:
.
$300,000
100,000
.
$400,000
Total Activity
Activity Cost Pool
Supporting direct labor
Order processing
Customer support
Other
.
.
.
, .
Activity Measure
for the Year
Number of direct labor-hOUrs
Number of customer orders
Number of customers
This is an organizationsustaining activity
20,000 DLHs
400 orders
200 customers
Not applicable
Contd
~.
L'
P/5
•
=5=
IPE 481 (ME)
Contd ••. Q. No. 7(a)
DistribUtion of Resource Consumption Across Activities
Supporting
Direct Labor
Order
Processing
Customer
Support
Other
Total
Wages and salaries ,
40%
30%
30%
10%
10%
40%
100%
Other overhead costs
20%
20%
100%
During the year, Advanced Products completed one order for a new customer, Shenzhen
Enterprises. This customer did not order any other products during the year. Data
concerning that order follow:
._-----
-D~t~--concerningtheShenzhen
Units ordered .,
Direct labor-hours
Selli!'l9 price
Direct materials
Direct labor
Enterprises Order.
10 units
.
.
.
.
.
,.
2 DLHs per unit
$300 per unit
$180 per unit
$50 per unit
Now,
(i) Prepare a report showing the first-stage allocations of overhead costs to the
activity cost pools.
(ii) Compute the activity rates for the activity cost pools.
(iii), Prepare' a report showing the overhead costs for the order from Shenzhen
Enterprises including customer support costs.
(b) Discuss the limitation; of averaging techniques of forecasting. How these limitations
(10)
can be avoided?
(c) A toy manufacturer uses 48000 rubber wheels per year for its popular dump truck
series. The firm makes its own wheels, which it can produce at a rate of 800 per day. The
. toy trucks are assembled uniformly over the year. Carrying cost is $1 per wheel per year.
Setup cost for a production run of wheels is $45. The firm operates 240 days per year.
Determine the following:
(i) The Optimal run siie
(ii) Minimum total annual cost for carrying and setup
(iii) cycle time for the optimal run size
(iv) Run time .
8. (a) End item A has a planned lead time of2 weeks. There are currently 120 units on hand
and scheduled receipts of 50 units arrive at week 3.
Week
Demand
(26%)
1
2
3
4
5
6
7
8
9
10
41
44
84
42
84
86
7
18
49
30
Contd
P/6
=6=
Contd ... Q. No. Sea)
(i) Compute the planned order releases using lot-far-lot.
(ii) Compute the planned order releases using PPB where the ratio of setup to holding
/
cost is 200.
(iii) Compare the total cost (setup and holding) for the above two techniques. The
,
-'
setup cost is $100 and holding cost is $1 per unit per week ..
'(b) Write short notes on the following
(i) Pegging
(ii) Time bucket
(iii) Exception reports
(iv) Critical ratio
)
.
(20)